Lithuania is preparing for the two largest public-private partnership (PPP) projects in its history—the construction of the Rūdninkai and Kairiai military towns. On December 11, the Government approved the Ministry of National Defence’s (MoD) plans to implement these strategic projects through PPP. The Central Project Management Agency (CPVA) will provide expert support to the ministry.
The Rūdninkai military town will be the largest military infrastructure project in Lithuanian history. The project will develop the remaining infrastructure of the Rūdninkai military town, covering an area of 170 hectares (10 times larger than the Rokantiškės military base). It will include 120 buildings occupying a total of 335,000 square meters. The total investment in the project is estimated at approximately €1.56 billion (including VAT, in real terms), with payments to the private partner expected to reach €2.42 billion (including VAT, in real terms).
“This is the most ambitious military infrastructure project in the history of independent Lithuania. Lithuania’s commitment to hosting the German brigade remains steadfast, and we are doing everything to make this happen as soon as possible. I am confident that we will create the best possible infrastructure for the German armed forces. The presence of the German brigade in Lithuania strengthens regional security and acts as a deterrent to potential adversaries,” said Acting Minister of National Defence Laurynas Kasčiūnas.
Under the bilateral agreement for the deployment of the German brigade in Lithuania, the Rūdninkai military training area requires tailored infrastructure. This includes residential, administrative, sports, storage and technical facilities, as well as helicopter pads and over 300,000 square meters of military grounds.
The Kairiai military town, while smaller (80 hectares), will also be significant. It will house approximately 1,526 soldiers and serve the Motorised Infantry Brigade “Žemaitija” and conscripts serving within its ranks. The infrastructure will include residential, administrative, sports, storage and technical facilities, as well as transport and helicopter pads. The total building area will be about 67,000 square meters, with engineering structures covering approximately 301,000 square meters and hard surfaces spanning 244,000 square meters. The total investment is estimated at €454 million (including VAT, in real terms), with payments to the private partner expected to reach €694 million (including VAT, in real terms).
Project timelines and progress
The MoD has already conducted market consultations for both projects. The Rūdninkai military town project was presented to potential investors, contractors and financiers during individual consultations. The military town is expected to become operational by the end of 2027.
The Kairiai project was introduced more broadly during the CPVA-organised “PPP Fair” in September 2024. The MoD plans to conduct a second market consultation on the project’s selection criteria in early 2025, with the selection procedures scheduled for the first quarter of 2025. A contract with the selected private partner is expected to be signed in the third quarter of 2026, with the town becoming operational by 2030.
Both projects will involve not only the design and construction of infrastructure but also the maintenance of the buildings. The maximum PPP contract term is planned at 15 years. For the Rūdninkai project, 2.5 years will be allocated for development (design and construction), with the remaining 12.5 years dedicated to maintenance. For Kairiai, design and construction will take three years, followed by 12 years of maintenance.
CPVA’s contribution
These are not the first PPP projects undertaken by the MoD. Military towns in Rokantiškės, Pajūris and Šiauliai have already been implemented through PPP. This partnership model enables rapid and efficient development of military infrastructure, as it does not require significant initial public sector investments, ensures quicker creation of the necessary infrastructure and transfers most of the project-related risks to the private sector.
The CPVA has contributed to all three previously completed military towns, assisting the ministry in selecting private partners and continuing to provide consultation on PPP contract implementation and oversight. The CPVA plans to continue offering expert support for the development of the new military towns.
“By choosing public-private partnership, the Ministry of National Defence gains an opportunity to significantly enhance national security and create proper conditions for hosting allied troops. The Central Project Management Agency is ready to continue providing expert assistance to the ministry at all stages of project preparation and implementation,” said Ernesta Buckienė, Deputy Director of the CPVA, currently Acting Director.
These projects represent another important step in strengthening Lithuania’s defensive capabilities and ensuring military infrastructure that meets the highest NATO standards.
